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Burundi to grow 4.5 pct in 2008, more next yr: IMF

The landlocked east African nation of 8 million people has a largely agricultural economy based on tea and coffee.

It is still recovering from civil conflict that raged for two decades until 2005 and killed around 300,000 people.

Like other nations in the east and central African region with large fuel and other import bills, it has felt the impact of global economic trends this year, starting with the rise in commodity prices during the first half of the year.

‘We hope that the country’s economic activity is going to improve next year, as we believe there won’t be other negative effects caused by higher international commodity prices,’ IMF country representative Israel De La Piedra told Reuters.

Burundi’s economy grew 3.6 percent last year.

The IMF official also forecast Burundi’s inflation to fall to 9 percent in 2009, from an estimated 22 percent for 2008.

Year-on year inflation eased to 24.9 percent in October from 25.6 percent in September, helped by falling oil prices.

De La Piedra urged Burundi to diversify an economy whose total GDP of about $1 billion makes it one of Africa’s smallest.

‘Efforts should be made to increase productivity of other crops like cotton, bananas and fruits,’ he said. ‘These can be exported and bring a lot of money to the country.’

He also encouraged President Pierre Nkurunziza’s government to improve business conditions for investors.

‘The country’s economy can’t be developed without the private sector,’ he said. ‘We need to set up good business conditions which will encourage foreign investors to come here and invest in other sectors like mining.’

Burundi has high hopes for exploiting nickel but says it cannot start mining for five years due to insufficient energy.

Former rebel leader Nkurunziza was elected in 2005 after a long, U.N.-backed peace process in what was hailed as an African success story. Rights groups and opposition parties have, however, increasingly accused him of authoritarianism.